Orange juice seen falling as rains improve growing conditions

General Comments: Futures closed a little lower in consolidation trading. Futures have been working generally lower since the USDA crop reports last week as showers have been seen and conditions are said to have improved in almost the entire state. USDA lowered production of Oranges in Florida, but decreased production had been expected. Traders are wrestling with more reports of losses from greening disease on the one side and beneficial rains that have hit the state on the other. Greening disease and what it might mean to production prospects continues to be a primary support item and will be for several years. Temperatures are warm in the state, but there are showers reported somewhere in the state every day now. The Valencia harvest is continuing. Brazil is seeing near to above normal temperatures and mostly dry weather.

Overnight News: Florida weather forecasts call for showers. Temperatures will average near to above normal.

Chart Trends: Trends in FCOJ are mixed to down with objectives of 141.00, 133.00, and 130.00 July. Support is at 145.00, 144.00, and 139.00 July, with resistance at 150.00, 154.00, and 156.00 July.

COTTON

General Comments: Futures were lower on what appeared to be long liquidation from speculators and perhaps some farm selling. Ideas of better weather in production areas were negative for prices. Traders talk of reduced production potential due to the poor weather seen until recently in the Delta and Southeast and still reported in parts of Texas. Trends are up. Ideas of good weather for US crops are still around. The weather has improved, but it is still too dry in Texas and drier weather is needed for the Delta and Southeast. Scattered showers are forecast for the Delta and Southeast, and wetter and warm weather is expected in Texas. Weather for Cotton appears good in India, Pakistan, and China. It is possible that futures made at least a short term high on Friday.

Overnight News: The Delta and Southeast will see some showers this week. Temperatures will average above normal. Texas will get showers today and tomorrow, then dry weather. Temperatures will average above normal. The USDA spot price is now 84.42 ct/lb. ICE said that certified Cotton stocks are now 0.543 million bales, from 0.539 million yesterday.

Chart Trends: Trends in Cotton are mixed to down with no objectives. Support is at 86.75, 85.60, and 84.75 October, with resistance of 90.10, 90.50, and 91.40 October.

About the Author

Jack Scovilleis a veteran futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar. His industry contacts in South America, Europe, Asia, and North America provide him with a unique and comprehensive view of these markets. Jack began working in the futures industry over 30 years ago and spent 10 years working on the floor of the Chicago Board of Trade in various roles, starting with The PRICE Futures Group since it was established in 1988. Jack writes daily commentaries - Morning Grains and Softs, in both English and Spanish and is regularly quoted around the world by news & wire services including Dow Jones, AP, Bloomberg, and Reuters. You can contact Jack by phone at (312) 264-4322 or by email at jscoville@pricegroup.com. Learn even more on our website at www.pricegroup.com.

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